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GoPro Q3 Earnings Are As Disastrous As It Could Get
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GoPro, Inc. reported a 40 percent loss in its third quarter earnings today. The wearable camera makerโ€™s sales dropped to $240.5 million from $400 million in 2015. On Thursday, the companyโ€™s stock price fell to $11.94 per share, a sharp plunge from $17.15 per share back in September. During the GoPro earnings call, CEO Nick Woodman put the blame of the poor third quarter sales on production issues with Hero 5 and Karma drone.

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GoPro Share-a-Drama

Shareholders have given up on the promise of a hopeful GoPro Q3 earnings report back in early October. During that period, specifically 21 trading days, the stock plunged nearly 30 percent.

GoPro shares have taken a disgraceful 88% fall from their 2014 high, and down more than 20% in after-hours trading. A year earlier, GoPro earnings report read a Q3 profit of $18.8 million, or 13 cents per share.

GoProโ€™s revenue and profit missed all analyst forecasts by a wide margin. According to a survey by FactSet, analysts estimated per-share loss of 51 cents a share, and revenue of $308 million.

GoPro, is known for its resilient line of action cameras. Chief Nick Woodman is placing huge bets on the newest cameras, Hero 5 and Karma Drone, which started selling in October. The Karma is the companyโ€™s first drone. Both the gadgets can, โ€œcan have a fundamental shift in momentum and trajectory of our business,โ€ he said. GoPro has lowered its sales target for the year, reflecting a weak holiday season. The company is reiterating from what it first believed, โ€œa quarter where we [GoPro] expect to return to profitabilityโ€. It doesnโ€™t look like the losses are temporary. GoPro expects to record a net loss in 2017.

Weak Holiday Season

Wearable device maker Fitbit, Inc., is also expecting lower revenue for the holiday quarter by as much as 25% attributing to a weak holiday season.

For the past few months, GoPro has been heavily investing in its new products. During its third quarter, GoPro shipped 1.02 million devices, a 36% sharp plunge from 1.59 million a year ago.

The sales of its new cameras are not as rosy as expected. GoPro temporarily halted the sale on Amazon in mid-October, while it negotiated pricing with the Seattle-based e-tailer. A company spokeswoman said the company has now resumed selling its cameras on Amazon.

Trouble Meeting Demands, Aspirations & Moreโ€ฆ

The shipments of its newest devices were delayed during the quarter as GoPro was unable to meet up the demands. Currently, GoPro is under a lot of pressure to go beyond the camera market. Itโ€™s desperately trying to enter the mainstream market. However, it faces competition from giants like Samsung and Apple.

In an interview with TechCrunch, Woodman told he aspired to turn GoPro into a lifestyle media company. But, it seems those plans are on hold as the company expects โ€œ2017 to be more of an evolutionary year, rather than a revolutionary year.โ€ For 2017, GoPro expects to cut non-GAAP operating expenses down to $650 million and return to profitability.

For now, GoPro is shouldering adversity, failure and hardships. Letโ€™s hope these unique experiences help GoPro come out on the strong side in 2017.

One Comment

  • Kenny Chea says:

    well no duhh it’s down. They barely have any available drones or accessories left. If they released everything already they wouldnt be fine.

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